Back to overview

The Ultimate Web3 Security Guide

For BeginnersIntermediateAdvanced

DeFi Investors

2023 Edition

Part 1 – Overview


⭐ In the exciting yet risky world of crypto, it’s vital to safeguard your funds from scams. Whether you are a newbie or a seasoned investor, this bite-sized guide will deliver tailored strategies to navigate decentralized finance with confidence and peace of mind.

Note: Guidance for lower levels also applies to those at higher levels

The Three Types of Crypto Investors

1. Beginner Low Low High
2. Intermediate Low ➡ Moderate Moderate
3. Advanced High High Low

General Characteristics

Level 1: Beginner

• invests only via centralized exchanges

• holds less than 10% of their net worth in crypto assets

• has less than $10,000 in total investments

• new to the basics of crypto investing

Level 2: Intermediate

• invests via one or more self-custody wallets

• holds between 10% – 30% of their net worth in crypto assets

• between $10,000 to $100,000 in total investments

• more comfortable taking on a higher level of risk

Level 3: Advanced

• invests via multi-signatures and hardware wallets

• holds more than 30% of their net worth in crypto assets

• has more than $100,000 in total investments

• high net worth individuals, professional investors, or institutions

Please note that these characteristics represent the general rule of thumb and can vary significantly depending on one’s financial circumstance, risk tolerance, investment goals, and other factors.

It is also essential to consult with a financial advisor or do your own research before making any investment decisions.

Part 2 – Beginner & Intermediate

Basic Security Setup

Level 1: Beginner

⭐ For those starting their crypto journey, custodial wallets can provide a user-friendly entry point. However, it’s essential to be aware of the trade-offs between convenience and control.


• Set up a strong and secure password.

• Store your passwords securely offline.

• Enable two-factor authentication (2FA).

• Double-check website URLs before logging in.

• Have an updated antivirus software running.

• Beware of social engineering & phishing scams.

• Track critical news regarding exchanges you use. 1

• Always do your own research (DYOR).


• Avoid storing large amounts of funds on exchanges. 2

• Never share your login credentials.

• Don’t engage with suspicious messages or offers.

• Avoid clicking on sponsored advertisements.

• Don’t blindly trust links inside social posts. 3

• Avoid opening email attachments from strangers.

• Stop doing transactions when tired, busy, or rushed.

• Do not use leverage.

Level 2: Intermediate

⭐ As you progress in your crypto journey, self-custody wallets offer great control over your assets but come with added complexity and responsibility.


• Choose a reputable wallet provider. 4

• Use a ‘burner’ (hot) wallet for day-to-day transactions and to interact with new protocols.

• Revoke unnecessary smart contract approvals. 5

• Use transaction simulation before sending funds. 6

• Use a dedicated internet browser profile for crypto.

• Use hardware (cold) wallets for storage.

• Use smart contract audits for new projects. 7

• Use virtual private networks (VPNs).


• Never share your wallet password or seed phrase.

• Don’t store your passwords or seed phrases digitally.

• Don’t use wallets with public Wi-Fi or public devices.

• Don’t install suspicious apps from unverified sources.

• Don’t blindly trust tokens promoted by influencers.

• Don’t interact with unrecognized airdrops. 8

• Don’t put a cold wallet seed phrase into a hot wallet.

• Don’t stay logged into your wallet after using it.

• Don’t invest in a project with a fully anonymous team.

1 – Stay updated with important crypto news. See News Section and @BlockbrainAI

2 – You can lose all your money on exchanges. Only use them for exchanging and trading.

3 Hacked Twitter and Discord accounts may post malicious links with wallet drainers.

4 – A reputable wallet provider must have:

• self-custody features

• audited by multiple third parties

• track record without security breaches

• legally compliant with your local laws

• positive feedback from users and experts

5 – Revoke risky approvals in your wallet. See Threats – Unrevoked Access

6 – Use transaction simulator extensions. Some of the known ones are Blowfish, Harpie, and WalletGuard.

7 – Detect vulnerabilities via smart contract audits. See Threats – Smart Contract Analyzer

8 – Identify dangerous airdrops. See Threats – Unrecognized NFTs.

Part 3 – Advanced

Basic Security Setup

Level 3: Advanced

⭐ For advanced DeFi investors, managing multiple wallets offers the highest level of control and security but requires a deeper understanding and proactive practice.


• Use multiple wallets for varying functions such as storing, trading, and interaction. (see below)

• Implement multi-signature wallets, requiring multiple approvals for transactions. 9

Delegate ownership of your cold wallet to a hot wallet to claim airdrops & mints without moving assets. 10

• Set up a safe wallet that intercepts unintended transactions in case of theft attempts. (see below)

• Keep a low profile with your digital footprints to avoid targeted social engineering attacks. 11

• Practice disaster recovery when moving funds.


• Don’t leave your hardware wallet unattended.

• Don’t keep all your funds in a single wallet or exchange account.

• Don’t use paper wallets, as they have inherent limitations and security risks.

• Don’t overlook the importance of regularly updating wallet firmware and antivirus software.

• Don’t neglect to regularly review and update your security based on best practices.

• Don’t risk losing all heritage by not educating your loved ones on how to access the funds (keyman risk).

The Three Must-Have Wallets For DeFi Investors

How to Balance Safety and Flexibility

1. Hardware Wallet – This is like a safe deposit box at a bank. It’s an offline, physical device where you store your crypto. Because the seed phrase is disconnected from the internet, it’s more secure. It’s similar to having a personal vault for your digital money. (Examples: Ledger, Trezor)

2. Burner Wallet – This is like a disposable prepaid card. Use it for small, everyday transactions, and don’t keep a large balance on it. If it gets lost or stolen, the loss is minimal. In the digital world, you’d use a burner wallet for minor transactions or testing out new decentralized sites. (Examples: Metamask, Phantom)

3. Safe Wallet – This is like a smart security system for your house. If it detects a break-in attempt, it automatically moves your crypto assets to a safe by submitting a transaction with a higher gas fee. The safe intercepts transactions that do not go to addresses you’ve identified as trusted. (Example: GateKeep)

9 – Some reputable multi-signature wallets include:,

10 – Some reputable wallet delegate providers include:,

11 – Minimize social media presence linked to blockchain activities by:

• using aliases or pseudonymous identities

• using privacy-oriented blockchains

• not undergoing KYC tied to your wallets

Part 4 – Summary



  1. Understand your investor level (beginner, intermediate, advanced) & adapt security practices accordingly.
  2. Use strong passwords, 2FA, and antivirus software.
  3. Keep minimal funds on exchanges.
  4. Store your login details and wallet seed phrases offline.
  5. Beware of sponsored ads, email attachments, public Wi-Fi, influencer promotion, and airdrops.
  6. Use URL scanners and transaction simulator extensions before interacting with new protocols.
  7. Use advanced tools like hardware wallets, multi-signature, and ownership delegation for large investments.
  8. Stay updated about your assets, exchanges, and wallets.
  9. Stay updated about new cryptocurrency threats and scams.
  10. Use a variety of wallets for different tasks for multi-layered defense.
  11. Ensure loved ones know how to access your crypto when necessary.

🎉 Congratulations on completing the three-tier security guide! 🎉

Remember, staying secure means staying vigilant – so make this guide your companion in your DeFi journey. Keep coming back to these steps to keep your practices sharp. We promise to constantly improve this guide with up-to-date information and security best practices.

And this is just the start – we’re working on more detailed, step-by-step tutorials for each investor level. Subscribe to our newsletter to get notified!

In the fast-paced world of decentralized finance, security is your strongest tool. Use it wisely, use it well, and you can explore the possibilities of blockchain with confidence.